Facebook is a great way to test your startup or business idea. You can informally promote your product or service amongst your immediate Facebook friends and see if there is demand. That humble hobby could end up being a great little business or even a runaway success.
But starting your business on Facebook does NOT mean you’re exempt from the usual legal requirements of owning and running a business. The Australian regulators are increasingly reviewing online businesses, including those started through social media channels, to make sure they’re complying with the law. Don’t risk getting a fine or penalty!
Here are 5 legal aspects you need to have thought through.
1. Facebook terms & conditions cover them, not you
Facebook’s Disclaimer and User Terms & Conditions statements are pretty thorough. But they cover your relationship with Facebook – not your relationship with any customers you sell to through Facebook.
You need to have thought through the Terms & Conditions under which you promise to do business – for example, your refund policy, shipping terms, any guarantees or restrictions of use, etc. Then you need to post these online so your customers can find them.
Disclaimers are also vital. No matter how careful you are, a customer might believe they suffered loss or damage as a result of using your product or service and try to claim compensation from you. Worst case scenario, you could lose your house. So limit your potential liability through a well written Limitation of Liability clause in your Terms & Conditions.
2. Facebook owns your customer list, not you
Facebook is a very convenient place of business – no website hosting costs, no programming skills required, ready access to over 1 billion users! But it comes at a cost. You do not have legal rights to your customer list or friends and Facebook can choose to close your page at any time.
Once you’ve launched on Facebook you should follow up with your own website – a place you own and can control. Then move these Facebook customers to your own website as soon as possible. Collect their email address and/or deepen your connection with them by showing you’re also active on other channels such as YouTube, Twitter, Pinterest, LinkedIn, etc.
3. Know your registration and regulatory obligations
Selling your goods and services through Facebook or online does not make you invisible to industry regulators – you need to run your business within the established rules. Research any Government regulations or industry body rules relating to the products or services you sell. These regulations are established to protect consumers and you need to abide by them.
For example, if you’re a Financial Planner you have to have certain qualifications and you need to fully understand your clients’ circumstances and tolerance for risk. If you’re selling weight loss supplements you cannot claim unrealistic results and any testimonials you publish have to be genuine.
In addition, the rules may vary by State or Territory. So make sure you’re well briefed and up-to-date on the rules governing your product or service, any licences or certification required and guarantees and replacements you have to offer.
4. Make sure you’re honest and protect your reputation
Always stick to the truth when promoting the features and benefits of your product or service, especially in advertisements. You are legally required, through Australian Consumer Law, to ensure that all claims about your products and services are true, accurate and not misleading. That includes your testimonials, which must be genuine.
Your online profile is an important element of your professional image. Once sullied, your reputation is difficult to repair. So make sure you conduct yourself professionally online. Never, ever loose your cool online – posting an angry comment or message is the quickest way to blow your image. If you attract a “troll” or “hater” don’t take their bait. Address their issue and move on – some people will just never be satisfied.
And remember, you are legally responsible for everything that is posted on your social media pages or website. So monitor all your online presences and remove any defamatory, offensive or copyrighted material posted by contributors.
5. Keep private information, private
So starting an online business via Facebook or other social media channels is certainly attractive, but don’t think you’re exempt from the law or legal requirements. Ensure you understand all the rules around selling your goods or services in Australia, ideally before you get going.